Bitcoin exchanges Gemini, Bitstamp, Bittrex, and bitFlyer today announced they have joined the Virtual Commodity Association (VCA) working group. Gemini, released the initial proposal back in March 2018, for an industry-sponsored, self-regulatory organization (SRO) concerning the U.S. virtual currency industry, specifically virtual commodity exchanges and custodians.
Cameron Winklevoss, Gemini Co-Founder, and President said, “We believe adding a layer of oversight on virtual commodity cash markets, in the form of self-regulation, is important for consumer protection and to ensure the integrity of these markets. We look forward to participating in the VCA with our peers and working with industry leaders, participants, regulators, and legislators.”
The SRO approach has historically worked to protect and police various markets. For example, the National Futures Association (NFA) is an SRO for the U.S. derivatives industry and is a model for how the VCA will work together with the Commodity Futures Trading Commission (CFTC) to provide additional oversight to virtual commodity cash markets. The promise of virtual commodities and their impact on the future will be profound — but individuals and institutions need to feel safe and secure when transacting on marketplaces. A thoughtful SRO framework that provides a virtual commodity regulatory program for the virtual commodity industry is the next logical step in the maturation of this market.
The initial participants in the VCA Working Group will include Bitstamp, Inc., bitFlyer USA, Inc., Bittrex, Inc., and Gemini Trust Company, LLC. The Working Group will work towards the goal of establishing an industry-sponsored, self-regulatory organization (SRO) to oversee virtual commodity marketplaces. The VCA will have an executive director, independent board, and establish a framework for industry best practices. The VCA interim Executive Director will be Maria Filipakis. Ms. Filipakis was formerly an Executive Deputy Superintendent at the New York Department of Financial Services (DFS) and was instrumental in drafting the DFS rules and regulations for virtual currency.
“We’re proud to be a part of the Virtual Commodity Association as a way to add another element of protection for consumers. We believe in the value of self-regulation, which we pursued in Europe almost from our inception, and look forward to following a similar path in the U.S. Those that can’t or won’t comply with regulations put consumers – and their own operations – at risk.”
“Regulations in the cryptocurrency space are evolving to encompass this new technology. Industry leaders with extensive knowledge and who are impacted by regulations should really be part of the conversation. bitFlyer is excited to see the start of coalitions and SROs in the US and we look forward to the formation of this working group.”
At the initial meeting, Working Group participants expect to discuss:
- Guidelines for membership in the VCA.
- Guidelines for best practices and rules-based marketplaces that will promote fairness, transparency, risk management, and liquidity.
- Guidelines for best practices that will address Member conflicts of interest, client communications, client disclosures, and record keeping.
- Staffing the VCA, to include an Executive Director, among others, and composition of the Board of Directors.
The Virtual Commodity Association (VCA) will hold the inaugural meeting of its Working Group in September 2018.